Mix and match

Drink mixes are creating quite a stir, so to speak, in the beverage category.

While lemonade, iced tea and fruit punch mixes remain grocery shelf mainstays and consumer pantry staples, the marketplace has been shaken up with a spate of new powdered and liquid mixes spanning many subcategories, including juices, dairy products, enhancers, nutritional drinks and adult beverages. Private label manufacturers and their retail partners increasingly are mixing up their respective portfolios of products, packaging and promotions.

\"We feel that there is a tremendous opportunity for growth in the private label drink mix category. Private label is not me too anymore,\" declares Corey Schiff, vice president of business development for Dallas-based Jus-Made, adding that innovation and tailored solutions are key in this category. \"We have a complete lab with an R&D team and mixologists on staff that can create innovative and exotic mixes.\"

Susie Frausto, vice president of marketing for Jel Sert Co. in West Chicago, Ill., also sees ongoing growth, thanks to forward-thinking collaborations between private label suppliers and retailers.

\"More and more consumers are entering the drink mix category because of the constant innovation that manufacturers have brought to the shelf,\" she says. \"The drink mix category first brought innovation to consumers via individual drink sticks that allowed for portability. Now the category offers liquid drink mixes allowing for personal customization. In addition to new product forms, the drink mix category has kept up with consumer trends by offering products with functional benefits such as energy or hydration.\"

consider investing in kid-friendly liquid drink enhancers.

miss seasonal opportunities to merchandise and promote drink mixes.

Innovative liquid drink mixes open up many new paths to growth, agrees Harry Overly, senior vice president of marketing for Bay Valley Foods/TreeHouse Foods, Platteville, Wis. He says liquid drink mixes deliver customization and convenience for consumers, who can take the products with them and add them to water, soda, tea, alcohol – or even oatmeal and icing – in amounts that vary from a little to a lot. Retailers could take advantage of consumers interest in liquid drink mixes, Overly believes.

\"The biggest barrier to purchase is price, so private label makes this a more permissible indulgence,\" he remarks.

Within the entire drink mix category – which also includes cocktail mixes and energy drink mixes – manufacturers can boost consumer attention and sales by continuing to innovate through product development and merchandising.

Enhance with enhancers
Its no secret that kid-friendly products score points with gatekeepers. Just look at the success of categories such as yogurt, ice cream novelties and fruit snacks.

And children long have been a target audience for drink mixes, given the value and ease of such products among busy and budget-conscious parents. But new opportunities beckon.

One example is in water enhancers geared to kids. Heartland Food Products Group of Carmel, Ind., recently entered into that subcategory with a new line of water enhancers for kids.

\"Within drink mixes, water enhancers have more than doubled to $245 million in the latest 52 weeks, while powdered drink mixes declined by 3 percent,\" points out David Rigg, Heartlands senior director of marketing and licensing, citing recent Nielsen data. \"New brands are entering the segment, so it is going to be a high-growth market for some time.\"

To continue that growth and appeal to kids, Heartland is focusing on flavor.

\"Private label brand consumers are looking for unique flavor profiles not offered by national brands. We launched an Energy Cherry Limeade and a Blue Raspberry Sport last year, and they were some of our most successful water enhancer items, even though they are unique in the space,\" Rigg explains.

Go natural
Private label companies and retailers also could garner more shopper interest and sales by appealing to the ongoing clamor for better-for-you products, including those with nutritional benefits, as well as those with a more natural or organic profile.

At Jus-Made, Schiff says that demand for more natural ingredients is evident in drink mix offerings.

\"Some of our latest private label products are premium specialty cocktails made with real fruit juice and unique and sophisticated ingredients,\" he says. \"Also, for the most part, our products contain natural flavors and sweeteners, and we use functional ingredients and superfruit juices to enhance some of our blends.\"

Size up the competition
Another way to maximize sales in drink mixes is to offer more sizes. The growth of single-serve mix-in powders, for instance, is a testament to the ongoing power of the convenience-minded, on-the-go consumer.

According to Schiff, Jus-Made offers multiple package options, including 4-ounce bottles, half gallons, gallons, 1-liter packages, pouches, shakers, party buckets and more. Providing more packaging choices helps meet the myriad needs of both retailer partners and shoppers, he says.

Frausto agrees that package ranges are important.

\"The real opportunity is to provide enough space that will ensure the right combination of canister, stick pack and liquid drink mix that will maximize category sales,\" she notes. \"Many times, the set space is limited, which will impact the success of the category.\"

Check out the merchandising
Mixing it up applies not just to a drink mix product, but also to the effectiveness of in-store displays and merchandising. Indeed, drink mixes often are sold throughout the store, with other juices and drinks, with water and with dairy, as well as in the over-21 alcoholic beverage section.

\"Merchandising drink mixes in other areas of the store that expand possible usage occasions is a great way to drive category growth for both mixes and other beverages that pair with mixes like sparkling water,\" Rigg says. \"Cross-merchandising with water, for example, has been the single most effective merchandising tactic for our enhancers.\"

Likewise, Schiff says that cross-merchandising works well in the adult beverage subcategory of drink mixes.

Meanwhile, with warmer weather ahead, retailers could and should make plans now for seasonal promotions spotlighting thirst-quenching, refreshing drink mixes. Drink mix end-cap displays and displays in other parts of the store, including up-front impulse areas, also catch shoppers attention.

\"The summer season is critical for the success of the year,\" Overly says, \"as 40 percent of units are sold in this timeframe. The weather is hot and kids are at home, so its the ideal time to drive consumption of water flavored with drink mixes. Secondary displays are critical to generate lift.\"

Drink mix category performance
Source: SymphonyIRI Group, a Chicago-based market research firm. Total U.S. supermarkets, drugstores, mass market retailers (including Walmart), military commissaries and select club and dollar retail chains, for the 52 weeks ending Dec. 30, 2012.
*Includes categories not listed here